NGO shut for falsifying its records

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An NGO supposedly established by former leader Deng Xiaoping has been dissolved by the central government for falsifying its accounts, the media reported yesterday.

The Ministry of Civil Affairs announced the decision to disband the Friends of China Study Foundation because it failed to meet the official registration requirement that at least 2.1 million yuan be held in its bank account. It was also found to have provided false information to the government in 1999 regarding its financial status.

The ministry acted on the advice of the China National Tourism Administration - the government body directly responsible for supervising the foundation.

The administration discovered the foundation had falsified its accounts to meet the minimum registration requirement. Its management was said to have borrowed 2.3 million yuan in order to pass the government assessment and the money was withdrawn once it qualified.

The Ministry of Civil Affairs launched an investigation in 2004 after receiving a report from the tourism administration and later decided to dissolve the foundation.

The Friends of China Study Foundation is a semi-official NGO set up about 20 years ago to promote educational and cultural exchange with friendly overseas organisations. It was one of the few NGOs on the mainland to have been heavily endorsed by the government. Enterprises donating money were given tax exemptions - a rarity on the mainland.

According to a foundation staff member, it was founded by Deng and its members were said to include many prominent leaders.